e-Invoice Exemptions in Malaysia and Relaxation Period [2026]

e-Invoicing in Malaysia has been mandated by the Inland Revenue Board of Malaysia (LHDN) since August 2024. Under this mandate, all businesses are required to issue and receive electronic invoices in real time, following the prescribed format. 

The rollout is phased, based on annual revenue thresholds, to allow businesses to gradually adapt. All B2B, B2C, and B2G transactions must be validated in real time through the government’s MyInvois system.

Key Takeaways:

• All B2B, B2C, and B2G transactions require e-invoices, including cross-border trade where Malaysian buyers must self-bill for imports. Businesses under RM1,000,000 are exempt.
• Malaysia's e-Invoice implementation timeline is based on revenue thresholds: >RM100m (Aug 2024), RM25-100m (Jan 2025), RM5-25m (Jul 2025), RM1-5m (Jan 2026).
• IRBM validates invoices in real-time, generating Unique Identification Numbers (UIN) and QR codes, with 72-hour windows for rejection or cancellation.
• Starting 1 January 2026, individual e-invoices are mandatory for transactions above RM10,000, no more consolidated invoices allowed.
• Non-compliance may lead to fines up to RM20,000 or 6 months' imprisonment under tax law.

What is an e-Invoice?

An e-invoice, or electronic invoice, is a structured electronic document of a commercial transaction between a seller (supplier) and a purchaser (buyer), in a predefined format (such as XML or JSON), that goes through the IRBM portal in real time for validation and recordkeeping.

What are the requirements for e-invoicing in Malaysia?

1. e-Invoices must be generated for B2B, B2C, and B2G transactions in UBL 2.1 format (XML or JSON)
2. e-Invoices can be generated and submitted either manually via the MyInvois Portal or automatically through direct API integration.
3. Each e-invoice must include 55 specific data fields, covering seller and buyer details, transaction items, quantities, prices, taxes, totals, and payment information.
4. All e-invoices must be digitally signed using a Digital Certificate issued by IRBM.

e-Invoicing Malaysia Implementation Timeline & Deadlines

Below is the updated Malaysia e-invoice implementation timeline, based on annual turnover, and the relaxation periods for each phase as per LHDN's latest guidelines.

All businesses operating in Malaysia (except the exemptions) must comply with e-invoicing mandate once their annual turnover or revenue reaches the threshold set for each rollout phase.

Determination of Annual Turnover or Revenue for e-Invoicing

The key reference for determining your phase (or exemption) is your audited financial statement or tax return for the relevant Year of Assessment (YA) by default it YA2022 or your first available year if your business is new.

• If your annual revenue is below RM1,000,000, you are exempt from e-invoicing.
• If you exceed RM1,000,000 in a later year, you must comply from the second year after you cross the threshold.
• For sole proprietors, the revenue from all owned businesses is added together.
• Your phase and start date are set by the highest annual revenue reported in the relevant year.
• Once required to implement e-invoicing, you must continue even if your revenue later falls below RM1,000,000.
• Regularly check your revenue and use your official audited accounts to confirm your compliance status.

e-Invoicing Process in Malaysia

The steps to generate an e-invoice in Malaysia vary depending on the e-invoicing model (API or MyInvois Portal) and whether the transaction is B2B or B2C. However, the majority of the process remains consistent. 

Here is a general overview:

e-Invoicing Process for B2B Transactions

e-Invoicing Process for B2C Transactions

Suppliers must issue e-invoices for all B2C transactions. However, many buyers, particularly end consumers and specific businesses, do not need an e-invoice. 

Therefore, the generation of e-invoices for B2C transactions varies based on the buyer's requirements:

• When the Buyer Requests an E-Invoice: Suppliers gather details from the buyer/consumer and generate e-invoices in real-time, similar to B2B e-invoices.
• When the Buyer Does Not Require an E-Invoice: The IRBM allows suppliers to consolidate transactions with buyers who do not need an e-invoice into a monthly consolidated e-invoice.

The process is clearly explained in the chart below for Malaysia B2C e-Invoicing.

e-Invoicing Model in Malaysia

In Malaysia, companies can choose from the following transmission modes to report e-invoices known as e-invoicing models

MyInvois Portal

The MyInvois Portal allows users to generate e-invoices manually, either one at a time or in bulk by uploading a spreadsheet in a predetermined format. 

This portal is ideal for Micro, Small, and Medium-sized Enterprises (MSMEs) or companies with lower transaction volumes due to the need for manual data entry. 

The portal can be accessed at preprod-mytax.hasil.gov.my or mytax.hasil.gov.my.

For instructions on how to log in for the first time, visit this MyInvois Portal Login and e-invoice generation guide.

Application Programming Interface (API)

Businesses can integrate their ERP, billing, or accounting systems with the MyInvois system through an API. This integration enables the automatic generation, sending, receiving, and correction of e-invoices directly through their systems, making it possible to handle large volumes of transactions in real-time.

Recognizing the complexity of this integration, the Lembaga Hasil Dalam Negeri (LHDN) has introduced the e-invoice Malaysia Software Development Kit (SDK).

Type of e-Invoices in Malaysia

The below documents must be issued in electronic format under Malaysia e-Invoice:

• Invoices: It is generally used to record transactions between supplier and buyer. Invoices also include a self-billed invoice issued for tracking expenses.
• Credit notes: A credit note is a document issued by sellers to make corrections to an e-Invoice issued previously mainly to lower the original invoice's value without returning money to the Buyer. It is generally used to adjust errors, apply discounts, or account for returned items. 
• Debit notes: In contrast to credit notes, debit notes are issued to record additional costs related to a previously issued e-Invoice.
• Refund notes: A refund e-Invoice is an official document issued by a Seller to record refund issued to the Buyer.

e-Invoice Exemptions in Malaysia

While e-invoicing is mandatory for most businesses operating in Malaysia, certain entities are specifically exempt from these requirements. Exemptions apply to the following:

1. Foreign diplomatic offices.
2. Individuals not conducting business.
3. Statutory bodies, authorities, and local authorities (for the collection of fees, charges, or statutory levies, and for transactions conducted before 1 July 2025)
4. International organizations (for transactions before 1 July 2025).
5. Taxpayers with annual revenue below RM1,000,000.

e-Invoicing Malaysia Guidelines PDF Download

Challenges of e-Invoicing for Businesses in Malaysia

The shift to e invoicing in Malaysia brings several challenges:

1. Compliance: Complying with the e-invoicing regulations for business through technological integrations is extremely challenging.
2. Technological Transition: Moving from manual to automated invoicing systems requires adaptation to new technologies, deep tech integrations and staff training.
3. Resistance to Change: Employees accustomed to traditional methods may resist adopting e-invoicing in Malaysia.
4. Feasibility: Smaller businesses with limited IT infrastructure and lower resources would struggle with the technological demands.
5. Data Accuracy and Integration: Integrating e-invoicing with existing systems and ensuring accurate data exchange is challenging.

Case Studies

Malaysia’s e-invoicing mandates require efficient compliance, automation, and data security. Her is how ClearTax delivered robust solutions for high-volume, complex business needs.

Case Study 1: Insurance Leader’s E-Invoicing Compliance

A major Malaysian insurer automated high-volume invoicing and met BNM’s RMiT standards across multiple ERPs.

• Challenge: Strict B2C regulations, password-protected invoices, custom templates, B2B invoice consolidation, and strong security across entities.
• Solution: Centralized e-invoicing, custom APIs, password protection, RMiT compliance.
• Result: 97.98% validation rate, 100,000+ e-invoices generated.

Read more on case study PDF

Case Study 2: Aviation Group’s E-Invoicing at Scale

A leading aviation group integrated 30 entities, processing 24 million invoices annually.

• Challenge: Real-time clearance, multi-ERP integration, LHDN compliance, data silos, security.
• Solution: Integration layers for validation, compliance features, bulk cancellations, 24/7 support.
• Result: 99% success, 550,000+ e-invoices in 20 days, scalable system.

Read more on case study PDF

How can ClearTax help your business with e-Invoicing in Malaysia?

ClearTax is an MDEC-accredited solution provider for e-Invoice in Malaysia. It integrates your business systems with the IRBM e-invoicing system to automate and ensure 100% compliance in e-invoice generation.

• Enterprise Solutions: ClearTax delivers robust solutions for enterprises, integrating seamlessly with any ERP or business system to ensure accurate and efficient e-invoicing.
• Integration of Multiple Sales Channels: ClearTax integrates various sales channels—both online and physical—ensuring 100% accuracy in e-invoicing by consolidating all sales into a single, compliant e-invoice.
• Buyer Portal: ClearTax provides a web portal and app for buyers to generate e-invoices independently, speeding up billing, reducing queue times, and improving the customer experience.

IRBM Industry Specific FAQ’s

The Malaysian government acknowledges that some industries have more complex business practices and billing systems, making e-invoicing more challenging. 

To address these complexities, the IRBM has published industry-specific FAQs as follows: 

• Healthcare
• Construction
• Telecommunication
• e-Commerce
• Petroleum Operations
• Insurance and Takaful
• Aviation
• Tourism
• Donations
• Financial Services, Stockbroking and Unit Trust   

Here is the complete list of FAQs on Malaysia e-Invoicing, covering topics such as industry-specific queries, the MyInvois portal, MSMEs, and more.